Saudi Oil Crisis Deepens as Aramco Suspends Yanbu Loadings

Saudi Arabia suspends Yanbu oil loadings after halting its East-West pipeline, sending Brent back to $108. Asia's Oil Crunch Sends Regional Benchmarks to Record Highs - Asia's oil industry is facing a double whammy of supply shortages and better-than-expected demand, with crude differentials across the region gradually climbing towards record highs. - Futures prices on China's Shanghai Futures Exchange rose to $138 per barrel on Tuesday, the highest reading on record, as Chinese refiners scramble to put their hands on available October supply. - Saudi Aramco's announced halt in Yanbu loadings could see some recovery in exports from Saudi terminals in the Gulf, however these flows would be massively constrained by unprecedented freight rates. - Chartering a VLCC in the Persian Gulf now costs $30-32 per barrel, with war risk premia and additional insurance coverage added on top, forcing Middle Eastern producers to risk transiting Hormuz with their own fleet. - Asia is expected to see its crude demand dip by 1.5 million b/d this year, with demand destruction spearheaded by lower consumption in China as Asian benchmarks now consistently trend $15-20 per barrel above ICE Brent. Market Movers - Canada's midstream giant Enbridge (TSO:ENB) announced it would acquire Blackstone-owned Tallgrass Energy's oil business for $2.55 billion in cash, expanding its US business by buying a majority stake in the 460,000 b/d Pony Express Pipeline. - Venezuela's state oil company PDVSA has restarted the fluid catalytic cracker of its 310,000 b/d Cardon refinery, greatly boosting the country's gasoline output after the neighboring Amuay refinery started to ramp up runs, too. - Japan's Organization for Metals and Energy Security (JOGMEC) signed its first emergency LNG supply deal with Malaysia's Petronas, expanding its contractual coverage beyond standard term deals. - QatarEnergy is negotiating LNG supply deals with several US exporters – including but not limited to Venture Global, Cheniere and Woodside - seeking to conclude long-term deals through 2031 to replace capacity damaged by Iranian attacks. - US LNG developer Sempra Infrastructure has agreed to supply 0.8 mtpa of LNG from the 2nd phase of its Port Arthur LNG terminal in Texas to Brazil's state oil firm Petrobras (NYSE:PBR) for 20 years, starting from 2030. Tuesday, September 15, 2026 First, there were Thursday rumours about strikes impacting Saudi Arabia's East-West pipeline and flumes visible from satellite imagery. Then, just after the London closure of markets, Saudi Arabia announced Friday that it had halted pipeline transportation via its key Hormuz bypass, stoking fears of long-term damage to its midstream infrastructure. The vicious cycle of bad news from Saudi Arabia reached its apex today, as Saudi Aramco confirmed that loadings from the Red Sea port of Yanbu have been suspended, lifting ICE Brent back to $108 per barrel.

Saudi Arabia suspends Yanbu oil loadings after halting its East-West pipeline, sending Brent back to $108. Asia’s Oil Crunch Sends Regional Benchmarks to Record Highs - Asia’s oil industry is facing a double whammy of supply shortages and better-than-expected demand, with crude differentials across the region gradually climbing towards record highs. - Futures prices on China’s Shanghai Futures Exchange rose to $138 per barrel on Tuesday, the highest reading on record, as Chinese refiners scramble to put their hands on available October supply. - Saudi Aramco’s announced halt in Yanbu loadings could see some recovery in exports from Saudi terminals in the Gulf, however these flows would be massively constrained by unprecedented freight rates. - Chartering a VLCC in the Persian Gulf now costs $30-32 per barrel, with war risk premia and additional insurance coverage added on top, forcing Middle Eastern producers to risk transiting Hormuz with their own fleet. - Asia is expected to see its crude demand dip by 1.5 million b/d this year, with demand destruction spearheaded by lower consumption in China as Asian benchmarks now consistently trend $15-20 per barrel above ICE Brent. Market Movers - Canada’s midstream giant Enbridge (TSO:ENB) announced it would acquire Blackstone-owned Tallgrass Energy’s oil business for $2.55 billion in cash, expanding its US business by buying a majority stake in the 460,000 b/d Pony Express Pipeline. - Venezuela’s state oil company PDVSA has restarted the fluid catalytic cracker of its 310,000 b/d Cardon refinery, greatly boosting the country’s gasoline output after the neighboring Amuay refinery started to ramp up runs, too. - Japan’s Organization for Metals and Energy Security (JOGMEC) signed its first emergency LNG supply deal with Malaysia’s Petronas, expanding its contractual coverage beyond standard term deals. - QatarEnergy is negotiating LNG supply deals with several US exporters – including but not limited to Venture Global, Cheniere and Woodside - seeking to conclude long-term deals through 2031 to replace capacity damaged by Iranian attacks. - US LNG developer Sempra Infrastructure has agreed to supply 0.8 mtpa of LNG from the 2nd phase of its Port Arthur LNG terminal in Texas to Brazil's state oil firm Petrobras (NYSE:PBR) for 20 years, starting from 2030. Tuesday, September 15, 2026 First, there were Thursday rumours about strikes impacting Saudi Arabia’s East-West pipeline and flumes visible from satellite imagery. Then, just after the London closure of markets, Saudi Arabia announced Friday that it had halted pipeline transportation via its key Hormuz bypass, stoking fears of long-term damage to its midstream infrastructure. The vicious cycle of bad news from Saudi Arabia reached its apex today, as Saudi Aramco confirmed that loadings from the Red Sea port of Yanbu have been suspended, lifting ICE Brent back to $108 per barrel. China Runs Rebound as Fuel Exports Recover. China's crude throughput rose 11% month-on-month to 13.9 million b/d in August as refiners ramped up fuel exports after Beijing lifted its export ban, while inventories were drawn down by 639,000 b/d to support refinery supply and export demand. Houthis Send Saudi Oil Back to Hormuz. Saudi Arabia is seeking to raise exports through Hormuz after attacks halted its 7 million b/d East-West pipeline, halting the main wartime outlet via Yanbu, however replacement of Red Sea flows is hindered by record tanker rates near $1 million/day. Trump’s Eyes Fragile Russia-Ukraine Energy Truce. US President Trump said Ukraine and Russia agreed to halt strikes on energy infrastructure, but neither side fully confirmed a reciprocal deal after several previous deals collapsed within several days, however gasoil futures fell on the news. Iran Expands Hormuz Shipping Blacklist to 77 Vessels. Tehran’s Strait authority added 20 ships for breaching its northern-corridor rules, warning that listed vessels and ships conducting STS operations with them risk fines or confiscation, although Iran has yet to enforce the designations. EPA to Scrap Power Plant Carbon Rules. The EPA is expected to repeal Biden-era carbon standards for coal- and gas-fired power plants, including requirements for technologies such as carbon capture, revoking the legal basis for regulating greenhouse-gas emissions from the power sector. Ukraine Drone Hits Defy Calls for Energy Truce. Ukraine’s army stated that it struck the crude processing unit of Rosneft's 170,000 b/d Syzran refinery, underscoring continued attacks on Russian energy infrastructure despite U.S. claims of a mutual halt to strikes on critical energy assets. Thailand and Malaysia Boost Key Gas Hub. State oil companies Petronas and PTT have signed a new 35-year PSC covering Block A-18-01 in the Malaysia-Thailand Joint Development Area, extending a project that supplies about 700 MMcf/d of gas shared equally between the two countries. Saudi Pipeline Woes Reach European Refiners. Saudi Aramco cancelled some late-September crude cargoes for European term buyers after the halt of the East-West pipeline, the first supply impact of Houthi attacks as shipping disruptions constrain both the Red Sea and Gulf export routes. US Eyes Deep-Sea Permits for Critical Minerals. The Trump administration signaled it could approve the first U.S. deep-sea mining permits within months, aiming to secure access to seabed deposits rich in battery and defense-critical minerals as Washington seeks to reduce dependence on China. Libyan Protests Trigger Force Majeure Threat. Operations were suspended at three fields in Libya after members of the Petroleum Facilities Guard closed a valve on the Hamada–Zawiya crude pipeline, prompting NOC to warn it may declare force majeure if the disruption persists or spreads. UAE Turns Iraqi Discounts into Trading Edge. ADNOC reportedly agreed to buy 72 million Iraqi barrels for August–September at discounts reaching $27 a barrel, using its tanker fleet and Fujairah access to exploit wartime dislocations even though daily Hormuz transits remain in single digits. White House Sanctions Russia’s 2nd Largest Bank. The US imposed Iran-related sanctions on Russia’s state-owned bank VTB (already excluded from the dollar system over Ukraine), accusing it of using rouble-rial settlement channels for trade with Tehran and ties with sanctioned Iranian lenders. China’s Mine Safety Push Slashes Output. China produced 361.82 million tonnes in August, down 7.7% year on year but up from July’s 343.21 million tonnes as Beijing intensified inspections after another gas explosion last month, with the August 14 blast killing 7 people in Hunan province. Senegal Turns to Eni to Revive Offshore Exploration. Senegal signed an agreement with Italian oil major ENI (BIT:ENI) to launch preliminary studies across five offshore blocks, seeking to restart exploration as the new deal underscores ENI’s role as the leading West African drilling specialist. Dangote’s $49 Billion Refinery Goes Public. Dangote launched Africa’s largest IPO this week, offering roughly 3% of its Lagos refinery to raise $1.6 billion—or $2.1 billion if oversubscribed— as the Nigerian downstream giant eyes the doubling of its capacity to 1.4 million b/d by 2029. By Tom Kool for Oilprice.com More Top Reads From Oilprice.com

Oil prices surge toward $100 as Houthi attacks, U.S. strikes on Iranian tankers and renewed Middle East tensions rattle markets. Europe’s Gas Prices Surge as Storage Fears Return - European natural gas prices have jumped to €75 per MWh ($25.5 per MMBtu), the highest since 2022 and more than double their level a year ago, as the continent’s low inventories spark fears of winter supply shocks. - Since the Al Nuaman LNG carrier delivered its cargo to Rovigo, Italy, in early April, the EU has not imported any Qatari LNG, equivalent to 8% of its 2025 imports. - European gas inventories are currently 66% full, with market watchers seeing Germany and the Netherlands as particularly vulnerable ahead of the winter season, with stocks at 54% and 48%, respectively. - Worsening Europe's gas import bill, LNG prices delivered into NWE continue to rise along with Asia’s JKM, reaching $24.5 per MMBtu this week, with barely any backwardation between October and December. - Six-month-high prices sap the Old Continent’s LNG buying, with September LNG imports expected to remain at August readings (7.5 million tonnes), down 13% year-over-year. Market Movers - French oil major TotalEnergies (NYSE:TTE) announced that its planned 6 mtpa Papua LNG project is making ‘decisive steps' towards an FID whilst it transferred operatorship to US major ExxonMobil (NYSE:XOM). - London-based energy giant Shell (LON:SHEL) is reportedly considering divesting all or part of its 72% stake in the Bintulu gas-to-liquids plant, potentially garnering as much as $1 billion. - Canadian oil producer Tamarack Valley Energy (TSO:TVE) agreed to merge with Headwater Exploration (TSO:HWX) in an all-stock deal worth $7.2 billion, creating the first-ever pure-play Clearwater producer with net output of 80,000 boe/day. - UK oil major BP (NYSE:BP) has appointed lan Tyler as permanent chair, having been appointed interim chair in May 2026 after his predecessor Albert Manifold was abruptly dismissed. - Italian oil major ENI (BIT:ENI) has signed a contract for the development of the giant Junin-5 heavy oil field in Venezuela, taking operatorship for the next 25 years. Tuesday, September 08, 2026 Houthi attacks on Saudi energy infrastructure (and their threats of potential military incursions) as well as US strikes on Iranian oil tankers have lifted oil prices above $99 per barrel, the highest in three months. With Israeli-Lebanese tensions flaring up again, it would only take one bellicose Trump message to push oil back into triple-digit territory. OPEC+ Holds October Targets Steady. OPEC+ left October 2026 production quotas unchanged after completing the rollback of its 1.65 million b/d voluntary cut in September, shifting focus toward a review of 2027 output baselines as the Iran conflict has capped the group's ability to ramp up output. Trump Threatens Trade Embargoes if Fed Holds Rates. President Trump warned he could impose a trade embargo on countries running surpluses against the U.S. unless the Federal Reserve cuts its 3.5-3.75% policy rate, potentially targeting major trading partners such as the EU, Canada and Mexico. Iran Threatens Gulf Exclusion Zone. Iran said it plans to establish a new maritime exclusion zone in the Gulf, expanding it all the way to the blockade perimeter of the US Navy, potentially claiming the UAE port of Fujairah and Oman’s Sohar as it warned the White House of its new ballistic missiles. Houthi Strikes Disrupt Saudi Aramco. Houthi missile and drone attacks forced the shutdown of operations at several Saudi energy facilities, including new strikes on the 400,000 b/d Jazan refinery and wounded 73 people, an unprecedented escalation of attacks on Saudi energy infrastructure. Dangote Targets $14 Billion Expansion. Ahead of its upcoming IPO, Nigeria's Dangote refinery disclosed that it plans to invest $14.3 billion to double processing capacity 1.4mn b/d by 2029, seeing the $1.6 billion IPO as a next step towards self-financing after posting a $1.8 billion profit in the first half of 2026. China Crude Imports Rebound as Beijing Lifts Ban. China's August crude imports rose 6.2% month-on-month to 8.93 million b/d, marking a 2nd consecutive monthly jump as Beijing eased its fuel export ban, while product exports jumped 29% from July despite ongoing weakness in domestic fuel demand. Milei Eyes Escalation of Falklands Dispute. Argentina’s government said it will file criminal complaints against Navitas Petroleum (TLV:NVPT) and its executives over their activity in the Falkland Islands, intensifying pressure on the 50,000 b/d Sea Lion project ahead of its planned 2028 commissioning. Congo Tightens Grip on Critical Minerals Data. The DRC plans to launch a state-controlled geological databank by end-2026, giving Kinshasa greater oversight of exploration in a country that holds 6 million tonnes of cobalt reserves but remains only 20% explored, boosting control over future cobalt supply. Qatar LNG Exits Hormuz After Two-Month Hiatus. Qatar's first LNG cargo since July has successfully transited the Strait of Hormuz, with the Al Marrouna carrier bound for Pakistan, signaling a tentative recovery in exports from a supplier that typically accounts for around 20% of global LNG trade. Ukraine Hits Ryazan Refinery Again. Ukraine reported a drone strike on Rosneft's 342,000 b/d Ryazan refinery, sparking a fire at the site and marking the most significant hit in September to date, just as Russia's crude processing rates started to rebound after falling to 3.9 million b/dbin July, a 21-year low. Copper Hits Record as Global Stocks Shrink. The LME’s benchmark three-month copper contract climbed to a record of $14,617 per tonne this week as inventories outside the U.S. tightened sharply, with 51% of LME stocks slated for withdrawal and SHFE stock inventories down 85% since March. Aramco Delays Cargoes to Europe. Saudi Aramco has reportedly delayed some September oil cargoes to European buyers despite nominations rising to 1.3 million b/d, suggesting Houthi missile strikes in the Red Sea are disrupting exports, with August loadings at a mere 2.2 million b/d. Sri Lanka Eyes the Doubling of Refining Capacity. Sri Lanka's Ceylon Petroleum Corp plans to double refining capacity to 100,000 b/d within four years and will seek a joint-venture partner through a tender process, seeking to end its dependence on fuel imports in the wake of the U.S.-Iran war. China Car Sales Slide as Exports Surge. China's passenger vehicle sales fell 24% year-on-year to 1.54 million units in August, the 11th straight year-on-year drop, as carmakers are increasingly relying on demand overseas, with exports jumping 78% to 888,000 vehicles, accounting for 38% of all sales. Brazil Counts on Pre-Salt Windfall. Brazil expects to raise 22.4 billion reais ($4.4 billion) from a special pre-salt oil auction in 2027, with the proceeds exceeding its projected $3.6-billion primary surplus and forming a key pillar of the government's plan to deliver its first fiscal surplus since 2022. China Stalls Rio Purchases Amid Iron Ore Talks. China's state-backed CMRG has reportedly instructed steel mills to postpone purchases of Rio Tinto’s Pilbara iron ore during contract negotiations, a move that could affect supplies representing nearly 20% of China's annual iron ore imports. By Tom Kool for Oilprice.com More Top Reads From Oilprice.com